Minimum Wage. Good or Bad?

I'm quite confident that it's a bad thing to have a minimum wage set by government. but I want to hear all argument for and against.

Minimum wage laws make it harder for workers whose contribution is worth less than the minimum wage to enter the work force. For example, lets say your work only pays 2£ and the minimum wage is 3£. It's a net loss to hire you.

Of course, some might say that would be exploiting the workers. But by barring them from taking that low payed job -which they obviously wanted to take- are you improving their situation in any way? No, merely removing an option for them. Perhaps some prefer to see people unemployed rather than have a low pay job.

They say that a minimum wage is needed to ensure that the employers aren't screwing over the workers by paying them very low wages. But in Sweden, we don't have a minimum wage set by government and yet we have some of the best working conditions in the world. Why? Because of unions. Workers get paid by their market price, and they can increase their price by organising into unions.

Any other thoughts and arguments?

 

Both. Your argument depends on the elasticity of demand for min wage labor. There are some level of jobs that require MW labor, and businesses will pay for it even if the costs go up. But certainly there can be a level were the negative effects (loss of employment) outweighs the benefit.

The benefits are increased income for the poorest workers. This helps offset the problematic growing wealth divide as well as provides those at the bottom with a little better qualify of life. So I think some level of MW is beneficial. It is IMO one of the ways we can try to reverse the trend of more and more of the nation's income and wealth going to just the very richest.

 

I have a personal story for this.

You remember back decades ago when, if a business owner didn't feel like doing menial little tasks himself, he'd hire one of the neighbourhood kids to, say, wash the dishes in his restaurant so the other employees who'd been working all day could go home without having to do the cleanup themselves? He'd give the kid a couple of bucks when he was done and the kid was happy he'd made some money. Minimum wage basically destroys such a job and means that only jobs that are worth a certain wage and up can exist. If the job is worth less than the minimum wage the employer cannot hire anyone to do that job, so someone else already employed has to do it. That's fine for everyone else, but the problem is it cuts out a lot of entry-level jobs that the high school kids with no skills would usually take. In other words, less people are employed while the people that are employed are paid no more than they would be otherwise.

In my town, jobs were scarce. Since the little menial jobs didn't exist because you had to be paid minimum wage, you had to have at least some skills to be worth minimum wage. Before the town's economy got even worse (I lived in the little bit of Canada that is ocnsidered part of the Rust Belt, and we know how those places are continually getting worse) , some of my friends managed to get jobs. I delayed until the next year, and then it was too late. Those kids were the only ones who secured jobs, everyone else was shut out because as things got worse the minimum wage jobs got taken by people who already had job experience of any kind. We could have taken anything - wash the floors, sweep the parking lot, whatever little job you need done; but those tasks got relegated to the other employees. Those jobs aren't worth minimum wage, and since you can't pay lower than minimum wage, the jobs don't exist. Thus most of us had no real jobs; some immediately turned to drug dealing, some even took to other kinds of smuggling, still others just gave up and partied.

I did off-and-on odd jobs for people, but it was nothing consistent. The town was full of retirees and since they have nothing better to do they usually do those kinds of jobs themselves just as something to do. Come to think of it, I hated the whole mentality of that town - very socially conservative, very stuck in their ways, didn't like change of any kind, protested and blocked every proposal for a new business or industry that could come to town and bring some jobs because they didn't want to "put up with" (yes, the excuses were seriously that lame and contrived) a factory or a megamall or anything like that. Nope, they wanted to sit in their lakeside houses and knit and garden and forget about the rest of the world or the prosperity of their town because "Hey, I'm gonna die in a couple decades so why should I give a (*)(*)(*)(*) what happens to this town?"

Didn't leave me with a lot of leeway when I went to university - pretty much all my money went to tuition and until I got some co-ops later on that paid well I was permanently broke. Good thing the internet can be a good substitute for many material possessions.

 

It is unacceptable for a person to be expected to work a job for less than a living wage. When that happens, local, state and federal government has to assist in bringing the employees standard of living up to a minimum level.....essentially handing a subsidy to the employer. He gets an employee........and the rest of us get to help pay for him/her.

The primary driver of any economy is demand. When there are not enough workers earning a living wage, there are not enough consumers with $$ to spend. The economy suffers.

I like the idea of a minimum living wage. Lets reward our workers with a decent standard of living in return for their labor......regardless of the field or industry. You work........you get to enjoy life. Period.

I also like the idea of a maximum wage for execs. Perhaps 50x the wage of the lowest paid employee in the company. A new hire in Florida earns $30k, his CEO earns a max of 1.5m.

 

Minimum wage: Inflationary.

Minimum wage encourages automation of low-paying jobs.

http://www.businessinsider.com/burger-robot-could-revolutionize-fast-food-industry-2012-11

But public employee and service union contracts are pegged to the minimum wage. A minimum wage increase may put burger-flippers on the bricks but union goof-off will get a raise.

 

Even back then they had a minimum wage. Kids working part time or apprentices or interns were exempted from getting the full MW. That is still true today.

 

who gets the $ if a cap is put on exec pay? if they also did that to sports stars do you think they would both perform the same? I dont, any time you cap a salary the incentive is lost...

 

You figure if Labron "only" got $10 mil a year he'd hang up his sneakers?

But I don't agree with caps either. A good progressive tax rate has the same effect and provides badly needed revenues to boot.

 

I pretty much agree. The thing is, in most of the country, the prevailing wage for unskilled workers is above the minimum wage.

 

I'v never bothered to look up how it works in the US, but here, the "student wage", which you can only give to people under 18 and which is only 75 cents lower than minimum, is what we were payed. It's still 9.50. And you are forbidden to go any lower. So it's still just another type of minimum wage.

 

The cap is achieved by employing the income tax. But the idea is to have execs put the company's profits back into the company and reward employees.

Something like this:

http://en.wikipedia.org/wiki/Mondragon_Corporation

 

Businessmen are dumb jock bullies. Because of their inferior mental ability, the only way they can make a profit is by squeezing it out of the people below them. It's time to get better businessmen by promoting from the ranks. If any special skills are needed, besides those learned on the job, the business must pay their talented employees a salary to learn them. Whining about having to pay higher wages is an attempt by conceited incompetents to cover up the fact that they have no right to their jobs. They are C-students who went to Bizz Skool because they were too stupid to be in college in the first place. Let the smartest become the richest, and they will create so much wealth that the businesses will be able to afford to pay someone $20 an hour to sweep the floor. Until then, it is the democratic duty of the employee to cheat his bosses as much as he can. Someone pushes a real man around and he gets paid back double. The corporate thieves should suffer punitive damages for benefiting from a dysfunctional, upside-down system.

Everybody knows yuppies are morons. That's why you'll never hear anyone asking a top high-school student, "So you got high grades? What are you going to major in when you get to college--Business Administration?"

The dysfunction of the system is caused by the fact that smart people will make far less than these dumb jock bullies. Academic economics is static, accepting the status quo of having inferior people in superior positions. That's why economics is no more scientific than astrology. It should be called "oinkonomics."

 

have not been paying attention to bb $ just saying if there is a low cap, why try harder? well I guess they still get the endorsements ?

 

you do know spain has like a 26% unemployment rate. it is a good idea

though just dont know how you would try to do it here on a grand scale.

 

Beats the alternatives. Are ball players really motivated to play harder because they are paid $20 mil instead of $20 mil? Did the guys in the 70s and 80s play less hard because they were only paid a small fraction of that? Does a CEO really work 10x when he's paid $10 mil instead of $1 mil?

The marginal utility theory says that the increases only add marginal value to the person. I think that at those levels many other things start playing into motivation than simply piling on more money. At least the incentive is not proportionally increased IMO. But I admit I'm not an expert in this area.

 

Or forced to take in an attempt to survive.

 

Yes there is still a minimum here too. I thought is was a couple bucks lower but I'm not sure and don't feel like looking it up at the moment.

 

Laws in America make it almost impossible to form a union today.

 

But can't that be achieved by labour organising into unions? Without any state interference and corruption of the free market?

If his work pays so little that means that his work isn't worth that much, and that signals that he should move to some other job or join a union. But I must say that your idea of partially state funded salaries is interesting. I'm waiting for a good libertarian response to it though.

If the minimum wage was abolished I don't think there'd be a shortage of people with enough money to comsume stuff.

The maximum wage is also an interesting idea. stuff like marginal utility is good, and hence why I also support a progressive tax. But I really want to hear a libertarian response to it. It seems that every cap and regulation always has some unintended negative effect, and because I judge by the results rather than the intent I'd like to be aware of those. Some questions would be, what's the harm of letting people get such high salaries? If we cap it, where'd that other money go?

Really? I*m not suprsied. I think they should go then. labour must be able to organise.

 

If your country is just going to bring in third world immigrants to do every low paying entry level job, what is the point of not having a minimum wage? Young adults and the elderly have already been displaced from these jobs, so the argument that raising the minimum wage would raise the unemployment rate does not hold as much weight as you may think.

 

ah, yet another interesting factor. How does the minumum wage, or absence thereof, work depending on th immigration policy?

 

One cannot look at the minimum wage level in isolation of high levels of immigration. The two are very much intertwined.

 

I have no idea how this would play out. If MW was repealed I would at least hope employers would be required to post the wage they were paying, I mean their own minimum so prospective employees had an idea where they were starting from.

My fear is that most US citizens would not take extremely low paying jobs, and imported (legal and otherwise) workers would.

If you are a self employed worker you set your own wage. No law mandates that. Usually they expect a set amount for a set job and the quicker they get it done the more they make per hour.

I turn away 2 or three people a week trying to do odd jobs for me.

 

Make unions mandatory; change the law so you can't incorporate without a union. Then minimum wage will be unnecessary; waiting for the ruling class's government to make things better is an evasion of responsibility. If workers want something done, they have to do it themselves.

 

Unions don't work in a competitive economy.